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Reclaiming healthcare through blockchain

Could blockchain transform healthcare? A use case for healthcare claims.

September 25, 2018 | By Venu Yeluripati and Dennis Genetski

Challenges are mounting for the healthcare industry. Consider this: evolving government regulations, mandates and requirements; moving to a value-based care model; a cost-prohibitive operating model; patient engagement; and shrinking margins…just to name a few. Disruptors are lurking around every corner—payers, suppliers, vendors, consumers and organizations in the periphery. Forward and backward integrations as well as mergers and acquisitions make this an extremely volatile and competitive environment.

It’s time to act. Healthcare must put its reputation as a laggard technology adopter behind and look to emerging technologies to address and potentially solve some of these long-standing issues in an ever-changing industry landscape.

The prescription for change

While blockchain is a technology that’s been around for a while, organizations continue to struggle with how to use it to solve real-world business and industry problems. There’s increasing interest, especially as a solution to common challenges like data and transactional integrity, additional controls to support enhanced information security, secure data transmission and sharing.

These challenges aren’t unique to healthcare. They’re pervasive across all industries, but healthcare could benefit the most from implementing blockchain technology. The dynamic interrelationships between patient, provider and payer—as well as the regulatory landscape—provide unique challenges to solve and opportunities to pursue. Even with substantial technology investments, the healthcare industry still lacks the ability to efficiently share data across platforms. Better data collaboration means enhanced treatment and outcomes, more cost-effective care and transparency in a secure manner.

Here are the key benefits of integrating blockchain into healthcare:

Allows secure access and sharing for all patient care data as well as payment information for specific procedures

Here’s the bottom line: Providers are required to operate on increasingly thin margins—and the potential of blockchain to increase efficiency, reduce costs and improve efficiencies may be the solution.

Alleviating claims complexity

Our use case looks at where blockchain technology could have its biggest impact on patients, providers and payers—the health insurance claims adjudication process. Moving from a manual, muddled process to a blockchain-based solution would be a paradigmatic shift. Almost revolutionary—claims could be processed instantaneously. The time between service and payment would decrease substantially. And all of the confusion between the three parties involved could be resolved with each understanding their respective responsibilities immediately after an incident or episode of care.

Use Case: Claims Adjudication for Typical Episode of Care

Claims Adjudication Process – Current

Claims Adjudication Process – Using Blockchain

An Episode of Care Involving Multiple Providers

A patient requires a procedure from an outpatient clinic that involves five care providers—primary care physician, anesthesiologist, radiologist, specialist and inpatient care facility—who provide various services to the patient. All of the providers are in the payer’s network, but each belongs to a separate entity.

Patient receives more than six statements, one from each care provider and one for each claim to the payer, arriving at different times for different amounts without any consolidation of payment obligation information.

Providers likely don’t fully understand patient’s obligation. Even if cost of the care as negotiated with the payer is listed, the patient’s direct obligation is unclear, as the payer holds the information regarding the patient’s ultimate responsibility based on deductibles or copayments.

Payers’ statements attempt to boil down the patient’s direct obligation by distilling the negotiated cost of the care provided, as well as the status of deductibles and copays.

The episode of care appears as a single event, or block.

Immediately after the care episode, each provider creates an entry in the block, which serves as the definitive record for the claim.

Using distributed ledger blockchain technology, the payer has immediate access to the block, and can:

Update to reflect the prenegotiated prices for the specific contributions to the episode

Udate the patient’s final obligation to each provider

Pay their obligation to the provider electronically

Patient attempts to reconcile these statements.

Information is pushed out to the patient via an app or web portal. By the time the patient gets home from the procedure, they know exactly what is owed to whom and for what services.

Eventually, after the claim has been fully processed between the providers and the payer, the patient receives “final” statements from each of the providers that should reflect their ultimate obligation to each.

At this point, a lot of time has passed since the care episode. The patient has given up attempting to reconcile the paperwork resulting from the event, may not even remember which bills to refer to and the bills may be paid, and/or they may be turned over to collection.

The entire claims process is now paperless and instantaneous—no delays between care and billing, no confusing statements to reconcile.

Everything around the care episode can be found in a single place, with all of the information required by the patient, provider and payer available in real time, any time.

Almost every cause of frustration for each party involved is eliminated, except actually paying the bills, which is much easier when one knows exactly what is owed to whom.

Healthcare, powered by blockchain

A hyperledger blockchain business network is a permissioned ledger—providing consensus, provenance, immutability and finality. In a permissioned network, participants (i.e., payers, providers) will only see appropriate transactions, have access to a record of all transactions shared between them and maintain their own copy through replication.

Business rules are implied by the contract, embedded into the blockchain and executed with the transaction. The business network decides who endorses transactions, which are added to the ledger with appropriate confidentiality. Transactions cannot be modified, inserted or deleted without consensus, provenance, immutability and finality.

Applications use APIs to interact with the business network, so existing systems can be used. There is no cryptocurrency in the hyperledger business network.

Hyperledger Composer can be used to quickly model a current business network, containing existing assets and the transactions related to them. A business network is defined by Models, Script Files, ACLs and Metadata and packaged in a Business Network Archive.

Cutting-edge care

Blockchain technology may be the solution for true interoperability—connecting information on disparate networks to a common infrastructure to create an integrated solution. It allows patients, providers and payers to share a single version of the truth about a patient’s healthcare information. The future is bright: multiple providers, in multiple sites, could access an uncorrupted, secure and universal patient record while avoiding redundant tests, procedures or prescriptions. Payers with the right permissions could have access to relevant information to process claims rapidly and with precision. Patients would have transparency into the entire continuum of care.

Essentially, blockchain technology would not be centralizing health information in healthcare exchanges—it would be decentralizing the system in a secure and interoperable manner.

Venu Yeluripati is a practice director leading global delivery and client services for TEKsystems’ healthcare customers. He has over 18 years of experience leading complex business transformation engagements across the healthcare, communications, energy and high-tech industries.

Dennis Genetski is a delivery executive leading engagement operations and execution for TEKsystems’ healthcare customers. He has over 20 years of experience leading technology transformation and innovation in healthcare and financial services. He has his name on 11 U.S. and foreign patents, and a remarkably underwhelming ability to conform to any dress code.

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